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The Pound declined in Forex markets as UK Chancellor Osborne prepares to give the Bank of England power over mortgage lending risks. The BoE will control the size of mortgages compared to incomes and house values to provide stability to the housing market. Osborne will say that current housing market doesn’t pose an immediate threat but could in the future, according to the text from the speech he will deliver tonight.

An expanding housing market or rising housing prices may prompt a central bank to raise interest rates. Therefore, non-monetary measures to cool the housing market may allow the BoE to refrain longer from raising interest rates. That could be the reason why the Pound declined sharply around the time of the release of the comments from the upcoming speech.

GBP/USD 1-Minute: June 12, 2014

The Pound declined 50 pips against the US Dollar near the time of the announcement, coming down from a 2-week high set earlier today at 1.6859. Currency Strategist Ilya Spivak recently entered a short position in GBP/USD following a retest of a rising trend line.

GBP/USD Daily by Ilya Spivak

Charts created by Baruch Spier and Ilya Spivak using Marketscope 2.0. Add DailyFX Support/Resistance to your charts at FXCM Apps.

-- Written by Baruch Spier, DailyFX Research. Feedback can be sent to bbspier@fxcm.com .